How to Invest in Mining Stocks
the company lives or dies on the results of its feasibility studies .
If the feasibility is positive , then the value of the company may shoot up . Often times a junior miner won ’ t mine a feasible deposit to the end , rather selling the deposit to a larger miner and move on to its next big thing . In this sense , junior mining stocks form an exploration pipeline that feeds the major miners in the end . With this being said , the big risks and rewards typically reside at the junior mining level .
To keep risks down , it ’ s best not to be exposed to only one type of asset . Instead of putting all your money in one small company , it is better to be diversified across several different sectors , commodities and companies . Being invested more broadly lessens the risk of losing all your money at any one time .
Tips As a beginner investor you should first decide whether you want to invest in junior mining stocks or major mining stocks . Juniors have the potential to offer a lot of appreciation in the right market , which makes them ideal for risky players . If you ’ re looking for lower-risk stocks with the potential for dividends and some decent appreciation , then major mining stocks are right for you .
Investing in a broad market , especially one that gives some international exposure is a smart move for first time investors . A portfolio consisting of plenty of diversification provides the steadier performance of large companies along with a bit of international companies and small caps .
According to Jim Mueller , a selftaught investor and financial writer for Nasdaq , before you start investing it is best to spend some time thinking about what you want to accomplish and how to do that while staying within your risk tolerance levels .
“ Doing this before committing those first dollars will go a long way toward protecting you from the emotional rollercoaster of investing first one way , then another , never really knowing why you are changing your mind . Careful thought before and during your investing career will do more to help your results than trying to chase the latest hot stock . After all , it ’ s your money - you should know what you are doing with it and why .”
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